Digital World Acquisition stock drops on report shareholders approve deal

investing.com:

Shares of Digital World Acquisition Corp (DWAC) dropped more than 7% Friday after news broke that a preliminary majority of the company's shareholders have voted in favor of merging with Trump Media And Technology Group.

Reuters reported that shareholders have approved a tie-up worth around $6 billion with the company that holds his app Truth Social. The deal is also said to value Trump's stake in the company at approximately $3.6 billion.

The shareholders are said to have voted in favor of the deal on Friday. DWAC looks set to list Trump Media & Technology Group on the stock market via a merger.

The next phase would be the finalization of the deal which would be completed next week. However, there could be issues, with DWAC's former CEO Patrick Orlando and former Trump business associates having sued to separately block the merger, saying they should get more shares for their previous work on the deal. According to Reuters, there is uncertainty about the resolution of these cases and it is unclear when and how they will be resolved.

Furthermore, they add that even if the deal is completed next week, Trump will not be allowed to sell any of his shares in the combined business for six months, according to the publication. This is based on previously agreed terms.